Canada Natural Gas Climbs on Below-Normal U.S. Inventory Gain

Canadian natural gas advanced after a government report showed a smaller-than-normal increase in U.S. stockpiles of the fuel last week amid hot weather.

August gas in Alberta rose 1.3 percent after the Energy Department said inventories expanded by 26 billion cubic feet last week to 3.189 trillion, below the five-year average gain of 61 billion for the period. MDA EarthSat Weather in Gaithersburg, Maryland, predicted above-normal temperatures in the central U.S. and Northeast from July 31 through Aug. 9.

The storage report was “bullish when compared to last year and the five-year average injection level for the same week,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York, in a note to clients today. “The above-normal temperatures still are a positive for natural gas prices.”

Alberta gas for August delivery gained 3 cents to C$2.37 per gigajoule ($2.23 per million British thermal units) as of 3:15 p.m. New York time on NGX, a Canadian Internet market. Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp. (TRP)’s Alberta system.

Natural gas for August delivery on the New York Mercantile Exchange rose 3.5 cents, or 1.1 percent, to settle at $3.105 per million Btu. The futures have climbed 3.9 percent this year.

Cooling Demand

Cooling demand in the U.S. may be 14 percent above normal from Aug. 1 through Aug. 5, according to Weather Derivatives in Belton, Missouri.

The high temperature in Chicago on Aug. 1 may be 86 degrees Fahrenheit (30 Celsius), 3 above normal, said AccuWeather Inc. in State College, Pennsylvania.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 15.9 billion cubic feet at 3 p.m. New York time.

Gas was flowing at a daily rate of 2.05 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main Line.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.98 billion cubic feet.

There was no available capacity on TransCanada’s British Columbia system at Kingsgate. The system was forecast to carry 2.02 billion cubic feet today, above the estimated capacity of 2.018 billion.

The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 2.73 billion cubic feet at 2:05 p.m.

To contact the reporter on this story: Christine Buurma in New York at cbuurma1@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net